Premarket Report for Wednesday, March 10th, 2010

Economic and Financial reports:
(9:00 am) Wholesale inventories……………..est: +0.1%
(1:00 pm) Treasury statement………………...est: -$222.0 billion

Political appearances: Tsy Secy Geithner testifies before U.S. House panel on the FY2011 budget.

Commodities:
Early metals: London Gold is trading $1125-$1126; Silver is pegged $17.38-$17.43. Copper is up about 1 cent.  
Foreign Currencies: the currencies are mixed in the overnight trade. Investors first pushed the dollar higher Tuesday as concerns about euro-zone debt flared, then trimmed its gains as they shifted back to riskier assets. The biggest winners in the seesaw battle between risk and safety were the commodity-linked currencies, with the Australian and New Zealand dollars bouncing back to end higher against the greenback. The pound and the euro ended lower on the day, but they managed a partial rebound from losses suffered after warnings from ratings agencies about deteriorating credit quality in Europe prompted investors to seek refuge in the dollar and the yen.
Energy: crude/products are mostly higher in the overnight trade.  U.S. Energy Secretary Steven Chu said Tuesday the Department of Energy is investing $154 million in a Texas clean coal project; Chu also said that nuclear energy is “part of the solution” to the country’s energy needs. Estimates for today’s inventory report: crude +1.6M bbls; distillates -1M bbls; gas “flat”; refinery usage 81.8%.
Grains and oilseeds: the grains/oilseeds are mixed in the overnight trade. The complex was mostly lower Tuesday ahead of today’s USDA report. Analysts (on average) expect the USDA to peg the corn crop at 13.081 billion bushels, down from a January estimate of 13.151 billion, but analysts say such a reduction wouldn't be enough to move the market higher, and some add that lower production will be balanced by a lower demand projection. Weak energy and bullion futures along with the mixed dollar contributed to the weakness; soy crush margins weakened.
Livestock: Cash cattle traded +$1 to +$2 Tuesday; tops were generally in a range from $91-$93.50; the carcass cutout fell $0.15; packer demand improved—235 loads were confirmed. Cash hogs were steady to -$1 Tuesday; the carcass cutout value rose $0.41 with weakened packer demand. There were increased offerings again late yesterday

Geopolitical/political/world news: Vice President Joe Biden condemned an Israeli plan to build hundreds of homes in disputed east Jerusalem on Tuesday — a disagreement that tarnished a high-profile visit that had been aimed at repairing ties with the Jewish state and kick starting Mideast peace talks. Israel's Interior Ministry said late Tuesday that it had approved construction of 1,600 new apartments, an embarrassing setback for Biden after a day of warm meetings with top Israeli officials. Former EC President and Italian Prime Minister Romano Prodi declared the “Greek financial problem is over.” Prodi pointed to Greek austerity programs and the successful bond sale for his optimism. 

Domestic equity markets: Major stock indices rose 0.1%-0.4% as trading ranges and volumes expanding moderately. Shares of four companies that have received huge infusions of taxpayer cash soared Tuesday after a report that the government would sell its stake in Citigroup Inc. raised hopes that other bailed-out companies would follow. Shares of insurer American International Group also rose after the company said it will sell its American Life Insurance Co. division for $15.5B to MetLife (on Monday); the government-approved deal, AIG's second big asset sale in two weeks, will give the insurer more cash to repay the billions of bailout dollars it still owes the government. Abbott Laboratories said it will buy Facet Biotech Corp. for about $450 million in cash, expanding the company's access to biotechnology drugs, including a potential treatment for multiple sclerosis. The debt/equity markets will focus on today’s reports: wholesale inventories and the Treasury balance; other reports this week include: business inventories, retail sales, the trade balance, weekly/ continuing jobless claims and the University of Michigan consumer sentiment index. American Eagle Outfitters, Brown-Forman, Gymboree, Jo-Ann Stores and Men’s Wearhouse lead the short list of companies reporting Q4 results today. 

European equity markets: the Swiss Market index is fractionally lower…the other regional bourses are trading higher (+0.1% to +0.5% in Norway) as of this writing. Munich Re, the world’s biggest reinsurer, reiterated its profit target for 2010 despite the Chile earthquake and claims from the harsh winter storm in Europe last month, which are expected to cost it about 500 million euros ($680 million); shares are trading +0.2%. Barclays fell 2.2% after the WSJ said the U.K.’s second-biggest bank is interested in purchasing a U.S. retail lender to obtain more deposits and expand its capital base.

Asian/Pacific Rim equity markets: the Shanghai Composite fell 0.66%; the other regional equity indices ended flat to higher (Kuala Lumpur was the best performer: +0.8%). China’s exports rose more than forecast (+46% in February from 2009 levels) and property prices jumped the most in almost two years, adding pressure on policy makers to pare stimulus measures adopted during the global recession. Japan’s machine orders fell 3.7% in January after the biggest rise since 2000 in December. FAW Car Co. retreated 2.8% and Poly Real Estate Group lost 1.7% after China’s positive export data; analysts now fear a rate hike by China’s Central bank.

 

David Andalman
Market Analyst
Commodity Trading Advisor
Robbins Futures Inc.

Registered Representative
Options Principal
Robbins Securities Inc.
1-800-859-1958
1-773-714-8361

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